Gannett Reports Third Quarter Results

"We are pleased with the revenue growth and continued strong margin
improvement in our ReachLocal segment reflecting the scale the business
is achieving," said Robert J. Dickey, president and chief executive
officer. "Additionally, our recent WordStream acquisition delivered
solid results in its first full reported quarter with revenues and
Adjusted EBITDA both ahead of our expectations."

Dickey continued, "Our Publishing segment digital advertising and
marketing services revenue growth slowed in the quarter, reflecting
challenges within the local digital media category, in part due to the
realignment of our sales organization. We expect the weaker results to
continue into the fourth quarter and are therefore lowering our full
year revenue and Adjusted EBITDA guidance."

"We remain focused on delivering growth in our digital business and
rationalizing our cost base in light of the revenue challenges," said
Ali Engel, chief financial officer. "In the fourth quarter, we are
instituting an early retirement program and have announced two
outsourcing initiatives within customer service and technology. While it
is too early to quantify the exact expected savings, we believe we will
achieve a significant benefit to our overall cost structure from these
initiatives in 2019."

Third Quarter 2018 Consolidated Results (2)

Operating revenues were $711.7 million, compared to $744.3 million in
the third quarter of 2017.

Digital marketing services revenues of $20.1 million rose 41.8%,
on a same store, day adjusted basis, driven by higher client
counts and higher average revenue per client.

Digital media revenues of $67.5 million fell 1.7%, on a same
store, day adjusted basis, as weakness in local display more than
offset strong growth in national revenues.

Digital classified revenues of $18.2 million fell 18.3%, on a same
store, day adjusted basis, reflecting weakness across all
categories.

Same store, day adjusted circulation revenues fell 4.4% from the prior
year quarter, better than the second quarter trend, reflecting the
continued benefit from our full-access subscriber pricing initiatives,
offset by expected revenue declines in single copy.

Digital-only subscriber volumes grew 48.8% year-over-year and now
total 472,000.

Publishing segment Adjusted EBITDA was $72.7 million compared to $87.5
million in the prior year quarter.

Third Quarter 2018 ReachLocal Segment

ReachLocal segment revenues were $109.6 million, up 16.8%
year-over-year, despite a negative impact of $1.0 million from the
fair value adjustment to WordStream's deferred revenue obligations as
required by U.S. GAAP as well as the divestiture of ReachLocal's
European operations. On a same store, day adjusted basis, ReachLocal
segment revenues grew 7.7%.

Adjusted EBITDA was $17.3 million, reflecting a 15.8% margin, up
materially from only $5.2 million in the third quarter of 2017.

The improved revenue and profitability in the quarter were driven by
the addition of WordStream, higher average revenue per client and
growth in our Gannett local and SweetIQ client bases.

Third Quarter 2018 Cash Flow

Net cash flow from operating activities was approximately $60.9
million, compared to $34.1 million in the prior year quarter. The
increase in net cash flow from operating activities primarily relates
to the timing of pension contributions of $25.0 million in the second
quarter of 2018, as compared to the third quarter of 2017.

Depreciation and amortization of $140-145 million, excluding
accelerated depreciation related to facility consolidations and
including an estimated $6.0 million for depreciation and intangibles
amortization related to WordStream.

The non-operating cost associated with our pension plans, recorded in
other non-operating items, is currently estimated to be a credit of
$5-7 million as compared to an expense of $21.0 million in 2017.

A non-GAAP effective tax rate of 25-26% (3).

1

The company defines same store, day adjusted revenue as same store
revenue assuming the 2018 third quarter results only had 91 days.
The third quarter of 2018 consisted of 92 days and the extra day was
a Sunday.

2

Beginning in the second quarter of 2018, we realigned the
presentation of web presence and software-as-a-service revenues from
other revenues to advertising and marketing services revenues on the
Condensed consolidated statements of income (loss). As a result of
this updated presentation, for the three and nine months ended
September 30, 2018, advertising and marketing services revenues
increased and other revenues decreased $11.3 million and $35.0
million, respectively. Additionally, advertising and marketing
services revenues increased and other revenues decreased $9.1
million and $25.0 million for the three and nine months ended
September 24, 2017, respectively. Operating revenues, net income,
retained earnings, and earnings per share remained unchanged.

3

The company defines adjusted EBITDA as earnings before income taxes,
interest expense, equity income, other non-operating items,
restructuring costs, acquisition-related expenses, asset impairment
charges, depreciation, amortization and other items. We define the
non-GAAP effective tax rate as the tax rate excluding any
non-recurring one-item tax adjustments. Because of the variability
of these and other items as well as the impact of future events on
these items, management is unable to reconcile without unreasonable
effort the company's forecasted range of adjusted EBITDA and
non-GAAP tax rate for the full year to a comparable GAAP range.

Conference Call Information

The company will hold a conference call at 10:00 a.m. ET today to
discuss its third quarter results. The call can be accessed via a live
webcast through the company's investor site, http://investors.gannett.com/,
or listen-only conference lines. U.S. callers should dial 855-462-1958
and international callers should dial 503-343-6635 at least 10 minutes
prior to the scheduled start of the call. The confirmation code for the
conference call is 8877478. A conference call replay will be available
through December 7, 2018. U.S. callers should dial 855-859-2056 and
international callers should dial 404-537-3406.

Forward Looking Statements

This press release contains certain forward-looking statements regarding
business strategies, market potential, future financial performance and
other matters. Forward-looking statements include all statements that
are not historical facts. The words "believe," "expect," "estimate,"
"could," "should," "intend," "may," "plan," "seek," "anticipate,"
"project" and similar expressions, among others, generally identify
forward-looking statements, which speak only as of the date the
statements were made and are not guarantees of future performance.
Where, in any forward-looking statement, an expectation or belief as to
future results or events is expressed, such expectation or belief is
based on the current plans and expectations of our management and
expressed in good faith and believed to have a reasonable basis, but
there can be no assurance that the expectation or belief will result or
be achieved or accomplished. Whether or not any such forward-looking
statements are in fact achieved will depend on future events, some of
which are beyond our control. The matters discussed in these
forward-looking statements are subject to a number of risks, trends,
uncertainties and other factors that could cause actual results to
differ materially from those projected, anticipated or implied in the
forward-looking statements. These factors include, among other things:

our ability to achieve our strategic transformation;

an accelerated decline in general print readership and/or advertiser
patterns as a result of competitive alternative media or other factors;

an inability to adapt to technological changes or grow our digital
businesses;

risks associated with the operation of an increasingly digital
business, such as rapid technological changes, frequent new product
introductions, declines in web traffic levels, technical failures and
proliferation of ad blocking technologies;

macroeconomic trends and conditions;

competitive pressures in the markets in which we operate;

increases in newsprint costs over the levels anticipated or declines
in newsprint supply;

potential disruption or interruption of our IT systems due to
accidents, extraordinary weather events, civil unrest, political
events, terrorism or cyber security attacks;

variability in the exchange rate relative to the U.S. dollar of
currencies in foreign jurisdictions in which we operate;

risks and uncertainties related to strategic acquisitions or
investments, including distraction of management attention, incurrence
of additional debt, integration challenges, and failure to realize
expected benefits or synergies or to operate businesses effectively
following acquisitions;

risks and uncertainties associated with our ReachLocal segment,
including its significant reliance on Google for media purchases, its
international operations and its ability to develop and gain market
acceptance for new products or services;

labor relations, including, but not limited to, labor disputes which
may cause business interruptions, revenue declines or increased labor
costs;

risks associated with our underfunded pension plans;

adverse outcomes in litigation or proceedings with governmental
authorities or administrative agencies, or changes in the regulatory
environment, any of which could encumber or impede our efforts to
improve operating results or the value of assets;

volatility in financial and credit markets which could affect the
value of retirement plan assets and our ability to raise funds through
debt or equity issuances and otherwise affect our ability to access
the credit and capital markets at the times and in the amounts needed
and on acceptable terms;

risks to our liquidity related to the redemption, conversion and
similar features of our convertible notes; and

other uncertainties relating to general economic, political, business,
industry, regulatory and market conditions.

A further description of these and other important risks, trends,
uncertainties and other factors is provided in the company's filings
with the U.S. Securities and Exchange Commission, including the
company's annual report on Form 10-K for fiscal year 2017. Any
forward-looking statements should be evaluated in light of these
important risk factors. The company is not responsible for updating or
revising any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

This press release also contains a discussion of certain non-GAAP
financial measures that the company presents to allow investors and
analysts to measure, analyze and compare its financial condition and
results of operations in a meaningful and consistent manner. A
reconciliation of these non-GAAP financial measures to the most directly
comparable GAAP measures can be found in the tables accompanying this
press release.

About Gannett

Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused
media and marketing solutions company committed to strengthening
communities across our network. With an unmatched local-to-national
reach, Gannett touches the lives of more than 125 million people monthly
with our Pulitzer-Prize winning content, consumer experiences and
benefits, and advertiser products and services. Gannett brands include
USA TODAY NETWORK with the iconic USA TODAY and more than 100 local
media brands, digital marketing services companies ReachLocal and
SweetIQ, and U.K. media company Newsquest. To connect with us, visit www.gannett.com.

CONSOLIDATED STATEMENTS OF INCOME

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands (except per share amounts)

Table No. 1

Three months ended

Nine months ended

September 30,

September 24,

September 30,

September 24,

2018

2017

2018

2017

Operating revenues:

Advertising and marketing services

$

403,374

$

429,911

$

1,233,849

$

1,326,499

Circulation

258,873

264,413

789,265

821,375

Other

49,467

49,950

142,319

144,364

Total operating revenues

711,714

744,274

2,165,433

2,292,238

Operating expenses:

Cost of sales and operating expenses

446,423

471,986

1,355,460

1,452,630

Selling, general and administrative expenses

200,093

203,418

612,235

619,659

Depreciation and amortization

38,427

49,786

117,057

148,453

Restructuring costs

11,535

5,789

33,445

28,167

Asset impairment charges

1,701

1,517

15,940

20,014

Total operating expenses

698,179

732,496

2,134,137

2,268,923

Operating income

13,535

11,778

31,296

23,315

Non-operating income (expenses):

Interest expense

(7,135

)

(4,613

)

(17,548

)

(12,322

)

Other non-operating items, net

9,800

(922

)

18,153

(10,110

)

Total non-operating income (expenses)

2,665

(5,535

)

605

(22,432

)

Income before income taxes

16,200

6,243

31,901

883

Provision (benefit) for income taxes

2,848

(16,801

)

2,620

(19,595

)

Net income

$

13,352

$

23,044

$

29,281

$

20,478

Earnings per share - basic

$

0.12

$

0.20

$

0.26

$

0.18

Earnings per share - diluted

$

0.11

$

0.20

$

0.25

$

0.18

Weighted average number of common shares outstanding:

Basic

113,047

113,253

112,916

113,467

Diluted

116,271

115,774

116,113

115,655

SEGMENT INFORMATION

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands

Table No. 2

Three months ended

Nine months ended

September 30,

September 24,

September 30,

September 24,

2018

2017

2018

2017

Operating revenues:

Publishing

$

616,384

$

660,338

$

1,899,595

$

2,047,442

ReachLocal

109,566

93,817

306,489

257,308

Corporate and Other

1,731

1,338

5,516

3,347

Intersegment eliminations

(15,967

)

(11,219

)

(46,167

)

(15,859

)

Total

$

711,714

$

744,274

$

2,165,433

$

2,292,238

Adjusted EBITDA:

Publishing

$

72,739

$

87,451

$

244,855

$

283,235

ReachLocal

17,340

5,229

33,820

9,592

Corporate and Other

(19,987

)

(18,827

)

(67,916

)

(65,639

)

Total

$

70,092

$

73,853

$

210,759

$

227,188

Depreciation and amortization:

Publishing

$

21,382

$

35,053

$

71,828

$

106,116

ReachLocal

12,096

8,846

29,505

25,504

Corporate and Other

4,949

5,887

15,724

16,833

Total

$

38,427

$

49,786

$

117,057

$

148,453

Capital expenditures:

Publishing

$

4,421

$

6,359

$

14,851

$

23,586

ReachLocal

5,422

5,004

13,164

12,904

Corporate and Other

6,498

5,690

15,848

10,394

Total

$

16,341

$

17,053

$

43,863

$

46,884

SAME STORE REVENUE DETAIL

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands

Table No. 3

Three months ended

September 30,

September 24,

2018

2017

% Change

Reported revenues

$

711,714

$

744,274

(4.4

%)

Acquired revenues

(22,124

)

-

***

Currency impact

2,372

-

***

Day-adjusted impacts

(11,183

)

-

***

Exited operations

$

(183

)

$

(4,008

)

(95.4

%)

Same store revenues

$

680,596

$

740,266

(8.1

%)

Reported advertising and marketing services revenues

$

403,374

$

429,911

(6.2

%)

Acquired revenues

(19,132

)

-

***

Currency impact

2,318

-

***

Day-adjusted impacts

(7,145

)

-

***

Exited operations

$

(183

)

$

(4,008

)

(95.4

%)

Same store advertising and marketing services revenues

$

379,232

$

425,903

(11.0

%)

Reported circulation revenues

$

258,873

$

264,413

(2.1

%)

Acquired revenues

(2,205

)

-

***

Currency impact

42

-

***

Day-adjusted impacts

(3,854

)

-

***

Same store circulation revenues

$

252,856

$

264,413

(4.4

%)

PUBLISHING REVENUE DETAIL

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands

Table No. 4

Three months ended

September 30,

September 24,

2018

2017

% Change

Publishing revenues detail

Print advertising:

Local

$

90,713

$

108,910

(16.7

%)

Classified

67,970

79,175

(14.2

%)

National

45,341

56,758

(20.1

%)

Total print advertising

204,024

244,843

(16.7

%)

Digital advertising and marketing services:

Digital media

67,504

66,654

1.3

%

Digital classified

18,181

21,805

(16.6

%)

Digital marketing services

20,066

14,011

43.2

%

Total digital advertising and marketing services

105,751

102,470

3.2

%

Total advertising and marketing services

309,775

347,313

(10.8

%)

Circulation

258,873

264,413

(2.1

%)

Other

47,736

48,612

(1.8

%)

Total Publishing revenues

$

616,384

$

660,338

(6.7

%)

USE OF NON-GAAP INFORMATION

The company uses non-GAAP financial performance and liquidity measures
to supplement the financial information presented on a GAAP basis. These
non-GAAP financial measures, which may not be comparable to similarly
titled measures reported by other companies, should not be considered in
isolation from or as a substitute for the related GAAP measures and
should be read together with financial information presented on a GAAP
basis.

Adjusted net income is a non-GAAP financial performance measure
that the company uses for calculating adjusted earnings per share
("EPS"). Adjusted net income is defined as net income before the
adjustments we apply in calculating adjusted EPS, as described below.
We believe presenting adjusted net income is useful to enable
investors to understand how we calculate adjusted EPS, which provides
a useful view of the overall operation of the company's business. The
most directly comparable GAAP financial measure is net income.

Adjusted diluted EPS is a non-GAAP financial performance
measure that the company believes offers a useful view of the overall
operation of our business. The company defines adjusted EPS as EPS
before tax-effected (1) restructuring costs, (2) asset impairment
charges, (3) acquisition-related expenses (including certain
integration expenses), (4) non-operating (gains) losses, and (5) other
items (including certain business transformation expenses, litigation
expenses, multi-employer pension withdrawals and gains or losses on
certain investments). The tax impact on these non-GAAP tax deductible
adjustments is based on the estimated statutory tax rates for the
United Kingdom of 19.0% and the United States of 25.5%. In addition,
tax is adjusted for impacts associated with new tax rates in the U.S.
Tax Cuts and Jobs Act. The most directly comparable GAAP financial
measure is diluted EPS.

Free cash flow is a non-GAAP liquidity measure that adjusts our
reported GAAP results for items that we believe are critical to the
ongoing success of our business. The company defines free cash flow as
cash flow from operating activities as reported on the statement of
cash flows less capital expenditures, which results in a figure
representing free cash flow available for use in operations,
additional investments, debt obligations, and returns to shareholders.
The most directly comparable GAAP financial measure is net cash from
operating activities.

The company uses non-GAAP financial measures for purposes of evaluating
its performance and liquidity. Therefore, the company believes that each
of the non-GAAP measures presented provides useful information to
investors by allowing them to view our businesses through the eyes of
our management and Board of Directors, facilitating comparison of
results across historical periods, and providing a focus on the
underlying ongoing operating performance of our business. Many of our
peer group companies present similar non-GAAP measures to better
facilitate industry comparisons.

NON-GAAP FINANCIAL INFORMATION

ADJUSTED EBITDA

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands

Table No. 5

Three months ended September 30, 2018

Corporate and

Consolidated

Publishing

ReachLocal

Other

Total

Net income (GAAP basis)

$

13,352

Provision (benefit) for income taxes

2,848

Interest expense

7,135

Other non-operating items, net

(9,800

)

Operating income (loss) (GAAP basis)

$

45,009

$

2,483

$

(33,957

)

$

13,535

Depreciation and amortization

21,382

12,096

4,949

38,427

Restructuring costs

4,919

1,159

5,457

11,535

Asset impairment charges

1,430

271

-

1,701

Acquisition-related items

-

311

2,874

3,185

Other items

(1

)

1,020

690

1,709

Adjusted EBITDA (non-GAAP basis)

$

72,739

$

17,340

$

(19,987

)

$

70,092

Three months ended September 24, 2017

Corporate and

Consolidated

Publishing

ReachLocal

Other

Total

Net income (GAAP basis)

$

23,044

Provision (benefit) for income taxes

(16,801

)

Interest expense

4,613

Other non-operating items, net

922

Operating income (loss) (GAAP basis)

$

43,638

$

(4,207

)

$

(27,653

)

$

11,778

Depreciation and amortization

35,053

8,846

5,887

49,786

Restructuring costs

6,093

191

(495

)

5,789

Asset impairment charges

1,517

-

-

1,517

Acquisition-related items

420

-

1,639

2,059

Other items

730

399

1,795

2,924

Adjusted EBITDA (non-GAAP basis)

$

87,451

$

5,229

$

(18,827

)

$

73,853

NON-GAAP FINANCIAL INFORMATION

ADJUSTED EBITDA

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands

Table No. 5 (continued)

Nine months ended September 30, 2018

Corporate and

Consolidated

Publishing

ReachLocal

Other

Total

Net income (GAAP basis)

$

29,281

Provision (benefit) for income taxes

2,620

Interest expense

17,548

Other non-operating items, net

(18,153

)

Operating income (loss) (GAAP basis)

$

133,212

$

(2,179

)

$

(99,737

)

$

31,296

Depreciation and amortization

71,828

29,505

15,724

117,057

Restructuring costs

22,603

4,704

6,138

33,445

Asset impairment charges

15,669

271

-

15,940

Acquisition-related items

-

432

6,699

7,131

Other items

1,543

1,087

3,260

5,890

Adjusted EBITDA (non-GAAP basis)

$

244,855

$

33,820

$

(67,916

)

$

210,759

Nine months ended September 24, 2017

Corporate and

Consolidated

Publishing

ReachLocal

Other

Total

Net income (GAAP basis)

$

20,478

Provision (benefit) for income taxes

(19,595

)

Interest expense

12,322

Other non-operating items, net

10,110

Operating income (loss) (GAAP basis)

$

139,363

$

(16,868

)

$

(99,180

)

$

23,315

Depreciation and amortization

106,116

25,504

16,833

148,453

Restructuring costs

23,966

514

3,687

28,167

Asset impairment charges

20,014

-

-

20,014

Acquisition-related items

331

43

4,278

4,652

Other items

(6,555

)

399

8,743

2,587

Adjusted EBITDA (non-GAAP basis)

$

283,235

$

9,592

$

(65,639

)

$

227,188

NON-GAAP FINANCIAL INFORMATION

ADJUSTED DILUTED EPS

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands (except per share amounts)

Table No. 6

Three months ended

Nine months ended

September

September

September

September

30, 2018

24, 2017

30, 2018

24, 2017

Restructuring costs (including accelerated depreciation)

$

13,665

$

19,841

$

41,722

$

65,798

Asset impairment charges

1,701

1,517

15,940

20,014

Acquisition-related items

3,186

2,059

7,131

4,652

(Gains) losses from non-operating activities

(5,510

)

857

(5,002

)

1,015

Other items

1,522

19

3,508

(3,179

)

Pretax impact

14,564

24,293

63,299

88,300

Income tax impact of above items

(4,062

)

(8,863

)

(16,161

)

(33,295

)

Tax benefit

$

(529

)

$

(20,086

)

$

(2,623

)

$

(20,086

)

Impact of items affecting comparability on net income

$

9,973

$

(4,656

)

$

44,515

$

34,919

Net income (GAAP basis)

$

13,352

$

23,044

$

29,281

$

20,478

Impact of items affecting comparability on net income

9,973

(4,656

)

44,515

34,919

Adjusted net income (non-GAAP basis)

$

23,325

$

18,388

$

73,796

$

55,397

Earnings per share - diluted (GAAP basis)

$

0.11

$

0.20

$

0.25

$

0.18

Impact of items affecting comparability on net income

0.09

(0.04

)

0.39

0.30

Adjusted earnings per share - diluted (non-GAAP basis)

$

0.20

$

0.16

$

0.64

$

0.48

Diluted weighted average number of common shares outstanding (GAAP
basis)

116,271

115,774

116,113

115,655

Diluted weighted average number of common shares outstanding
(non-GAAP basis)